Liberals complain over Obama concession

WASHINGTON -- President Barack Obama's weekend concession on a health care "government option" drew complaints from liberals and scarce interest from Republicans and other critics on Monday, a fresh sign of the daunting challenge in finding middle ground in an increasingly partisan political struggle.

The White House insisted there had been no shift in position, adding the president still favors a federal option for the sale of health insurance. "The bottom line is this: Nothing has changed," said a memo containing suggested answers for administration allies to use if asked about the issue.

But some supporters of health care overhaul sounded less than reassured.

"You really can't do health reform" without allowing the government to compete with private insurers, said Howard Dean, a former Democratic Party chairman. "Let's not say we're doing health reform without a public option," he added in a slap at the administration's latest move.

His remarks were echoed by lawmakers as well as AFL-CIO President John Sweeney, who said the option was the only way to force "real competition" on the insurance industry.

Obama and his top aides signaled retreat over the weekend on proposals for a provision under which consumers could choose from health insurance policies sold by the federal government as well as those marketed by private companies. "All I'm saying is, though, that the public option, whether we have it or we don't have it, is not the entirety of health care reform," the president told a town hall-style audience in Grand Junction, Colo., on Saturday. "This is just one sliver of it, one aspect of it."

The government option has emerged as one of the most contentious elements of legislation taking shape in Congress, with critics saying it is a step toward a federal takeover of health care and supporters arguing it is essential to create competition with private firms.

Proposals for creation of nonprofit co-operative ventures have emerged as an alternative, but so far, neither liberals nor conservatives have shown great interest.

Obama made his remarks as he struggled to regain momentum for a health care overhaul that has generated controversy among Democrats and near unanimous opposition among Republicans. Recent polls show a lessening of support, and the administration and its allies were thrown on the defensive earlier this month when angry protesters turned up at widely publicized town hall events held by Democratic lawmakers.

The bill faces numerous obstacles when lawmakers return to the Capitol after Labor Day.

In the House, where Democrats hold a 256-178 majority, passage of legislation will hinge on the ability of the administration and Democratic leaders to satisfy liberals who favor a robust government option and centrists who prefer the co-op approach.

Because they cannot realistically count on any Republican votes, the margin for error is reduced. At the same time, House leaders want to protect their rank-and-file centrists, who tend to come from swing districts, and whose victories in 2006 and 2008 helped give the party its large majority.

In a statement, Speaker Nancy Pelosi said, "There is strong support in the House for a public option," adding it is the best way "to lower costs, improve the quality of health care, ensure choice and expand coverage."

But the statement did not rule out legislation that lacks a government option.

There are similar Democratic divisions in the Senate, where the party controls 60 seats to 40 for the Republicans. A bipartisan group of six senators has been meeting for weeks on a possible compromise that would not include a government option. It is not clear whether they will be successful in reaching a final agreement.

While the president says he favors a bipartisan approach, he has also said it may ultimately be necessary for Democrats to produce a bill more to their own liking.

Jim Manley, spokesman for Senate Majority Leader Harry Reid, said the Nevada lawmaker "supports a public option" because it could keep insurance companies in check. "But he also knows that 60 votes will be needed to get anything done. Senator Reid recognizes there are different proposals on the table that could accomplish this goal," the spokesman said, a clear reference to the co-op alternative.

The co-ops envisioned by some backers would be nonprofit, member-owned groups that would assemble networks of health care providers and negotiate payment rates with them. The government would provide up to $6 billion to get them started.

The history of health care co-ops in the U.S. is uneven. Many have failed because they were unable to compete effectively, or because tensions between doctors and consumer-oriented governing boards could not be resolved. But some, including one in Washington state, have operated successfully.

Dean made his remarks in interviews on NBC and CBS. He and Obama are not close, and the administration snubbed the former party chairman earlier this year when it did not invite him to be present when his successor was named.

"Leaving private insurance companies the job of controlling the costs of health care is like making a pyromaniac the fire chief," said Rep., Anthony Weiner, D-N.Y. Weiner is one of dozens of Democrats who favor creation of a so-called "single payer" approach under which the government would take over the health care system. For many of them, the government option represents a significant retreat.

Rep. Barbara Lee, D-Calif., who chairs the Congressional Black Caucus, issued a statement that called the weekend administration statements deeply troubling. "The Congressional Black Caucus remains committed to ensuring that health reform is meaningful, and that means making sure that a public option is part of the package," she said.

The Senate Republican leader, Mitch McConnell of Kentucky, issued a statement that emphasized other complaints about Obama's proposals.

"While both political parties believe we need to reform our health care system, particularly in the areas of cost and access, Americans are rightly skeptical about the administration's approach to overhauling everyone's health care and about the more than $1 trillion price tag. Moreover, Americans are concerned about funding new government programs through massive cuts to Medicare and taxes on small business," he said.